Report Title:

Probate Mediation and Arbitration Choice Act

Description:

Improves the availability of arbitration and mediation as a means of resolving disputes arising out of wills or trusts between beneficiaries, trustees, or representatives.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

2675

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE PROBATE CODE.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that under current law, the intention of a testator of a will or settlor of a trust that any dispute arising out of the will or trust instrument with respect to their estate shall be arbitrated would not come under the Uniform Arbitration Act, chapter 658A, Hawaii Revised Statutes (HRS), which requires an agreement to arbitrate among the interested parties.

The legislature further finds that the testator or settler’s decision with respect to their own estate, electing arbitration and the terms under which such arbitration should occur, as long as such terms are consistent with chapter 658A, HRS, should control over the wishes of the beneficiaries, personal representatives, or trustees. Furthermore, it is the policy of this State to encourage the mediation of disputes, including probate disputes. Current law does not specify the method of notice of proposed mediation or notice of arbitration of a probate dispute or expressly provide for the appointment of representatives of minors or unascertained or unborn persons in probate mediation before litigation or in probate arbitrations.

The purpose of this Act is to amend the uniform probate code, chapter 560, HRS to:

(1) Provide that the testator of a will or settlor of a trust’s election of arbitration of disputes arising under their own will or trust shall be respected by the beneficiaries, personal representatives, or trustees, subject to the uniform arbitration act, chapter 658A, HRS;

(2) Provide that the existing arbitration statutes will

govern arbitration clauses in probate instruments as if the beneficiaries, personal representatives, or trustees, as parties to the dispute over the estate, agreed to arbitration under the terms specified by the maker or settlor;

(3) Provide that the testator of a will or settlor of a

trust’s election of mediation of disputes arising under their own will or trust shall be respected;

(4) Expressly provide a means for giving fair and adequate

notice to such interested parties to probate arbitration and mediation; and

(5) Expressly provide for the appointment of representatives of minors and unascertained or unborn persons by the court in probate arbitrations and mediations.

SECTION 2. Chapter 560, Hawaii revised statutes, is amended by adding a new section to article I, part 4, to be appropriately designated and to read as follows:

"§560:1-   Notice of arbitration or mediation. (a) Notice of arbitration or mediation of a dispute arising out of a will or trust instrument shall be given to interested parties and shall comply with section 560:1-401(a)(1), (2), or (3).

(b) The court, upon petition by any interested party, may appoint a guardian ad litem to represent the interests of any minor or unascertained or unborn person for mediation or arbitration of a dispute arising out of a will or trust instrument.

(c) For the purpose of this section, "interested party" includes beneficiaries, heirs, omitted beneficiaries, trustees, successor trustees, personal representatives, successor personal representatives, and anyone acting as a duly appointed guardian, attorney-in-fact, or personal representative for any of the foregoing."

SECTION 3. Chapter 560, Hawaii revised statutes, is amended by adding a new section to article II, part 7, to be appropriately designated and to read as follows:

"§560:2-   Arbitration and mediation clauses in wills and trust instruments. (a) An arbitration clause in a will or a trust instrument shall be given the same force and effect as to interested parties as if the clause was an agreement by the interested parties.

(b) A mediation clause in a will or trust instrument shall be binding upon all interested parties and shall be subject to the mediation rules for probate, trust, and guardianship of the property. A written demand for mediation citing the mediation clause in a will or trust instrument served upon all known interested parties shall have the same force and effect as a referral to mediation by the court under the mediation rules for probate, trust and guardianship of the property.

(c) For the purpose of this section, "interested party" includes beneficiaries, heirs, omitted beneficiaries, trustees, successor trustees, personal representatives, successor personal representatives and anyone acting as a duly appointed guardian, attorney-in-fact, or personal representative for any of the foregoing."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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